KPIT Technologies Ltd — Interim / Quarterly Report 2023

Oct 19, 2022

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October 19, 2022

BSE Limited

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400001.

National Stock Exchange of India Ltd., Exchange Plaza, C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai – 400051.

Scrip ID: KPITTECH Scrip Code: 542651

Symbol: KPITTECH Series: EQ

Kind Attn: The Manager, Department of Corporate Services

Kind Attn: The Manager, Listing Department

- Subject: Investor Update – Q2 FY 2023.

Dear Sir / Madam,

Please find enclosed the investor Update – Q2 FY 2023.

Kindly take the same on your records.

Thanking you.

Yours faithfully,

For KPIT Technologies Limited

DESHPANDE Digitally signed by DESHPANDE NIDA YUNUS NIDA YUNUS Date: 2022.10.19 11:50:29 +05'30'

Nida Deshpande

Company Secretary & Compliance Officer

Encl.: - As mentioned above.

KPIT Technologies Limited O +91 20 6770 6000 Registered & Corporate Office: Plot No. 17, Rajiv Gandhi Infotech Park, MIDC-SEZ, Phase-III, E ~~Maan, Taluka-M~~ info@kpit.com ulshi, Hinjawadi, Pune-411057, India. W kpit.com CIN: L74999PN2018PLC174192

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Reimagining Mobility with YOU

October 19, 2022 Investor Update Q2FY2023

KPIT Technologies Ltd.

Forward Looking Statements

Some of the statements in this update that are not historical facts, are forward-looking statements. These forward-looking statements include our financial and growth projections, as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the competitive market for the type of services and solutions that we offer, market conditions that could cause our clients to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry

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• 1 March 2021

Performance Overview

Q2FY23

Reimagining Mobility withYOU

Performance Overview Q2FY23

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Q2FY23 CC Revenue grows 27% YoY FY23 CC revenue growth outlook increased to 31% - 32%

Q2FY23 CC Revenue Growth of 27% Y-o-Y, 8.3% Q-o-Q 1 Revenue $ Revenue Growth of 17.2% Y-o-Y and 4.8% Q-o-Q Q2FY23 EBITDA growth of 33% Y-o-Y 2 Profit Net Profit growth of 28% Y-o-Y FY23 Organic Growth outlook increased to 23%+ FY23 3 against 18%-21% earlier. Outlook EBITDA margin outlook increased to 18.5%-19.0% Deals & Revenue Pipeline at all time high 4 Pipeline TCV of $ 142 million won during the quarter

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Performance Highlights

Sequential CC growth of 8.3% led by Digital Connected Solutions and Electric Powertrain domains. Growth led by 01 Commercial Vehicles vertical. cross Higher currency impact. Pipeline continues to grow stronger, at all time high.

EBITDA impact of 90 bps post wage hikes in the quarter ~ (gross impact of wage hikes 300bps). Fresher additions 02 and cross-currency headwinds impact continues. Operating efficiency, net realization improvement and revenue reduce on growth helped impact reported margins Lower other income to the tune of ₹ 58 million (₹ 94.9 in Q2FY23 vs ₹ 152.9 in Q1FY23) on account of translation 03 related foreign exchange losses resulting mainly from rupee depreciation/appreciation against the USD/Euro Net Cash at quarter end stood at ₹ 9.6 billion post dividend payout. DSO at 48 days. Purchase of KPIT shares 04 worth ₹ 220 million for ESOP Schemes by Employee Welfare Trust, during the quarter

02

04

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Additional facts - timeseries

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Revenue $ M
[89.9 94.2]
[87.1]
[83.7]
[77.2] [76.9] [76.9] [77.2] [80.4]
71.1 [72.8] [74.5]
65.3 65.3 [69.7]
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Consistent Performance

• 9 Consecutive Quarters of Steady Revenue Growth

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EBITDA ₹ M
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1,382
[1,041][1,150][1,2141,332]
931 [981]
639 [739] [727] [737] [751] [662] [697] [811]
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• 9 Consecutive Quarters of Steady EBITDA Growth

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Management Quotes

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Kishor Patil, Co-founder, CEO and MD, KPIT said,” Software is at the heart of the transformation that the mobility industry is witnessing. KPIT’s position as a leader in this transformation is leading to consistency in performance and long-term visibility of growth. Q2FY23 performance has been better than expectations. We have a healthy pipeline with a couple of mega engagements expected to get closed in the coming 3-4 months. We have thus raised our FY23 growth outlook to 31%-32%. The organic growth outlook is 200+ bps higher than the higher end of the 18%-21% outlook at the beginning of the year”.

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Sachin Tikekar, President and Joint MD, KPIT said, ” Vehicle makers are investing heavily to develop Software Defined Vehicles (SDVs) of tomorrow. This calls for deep domain expertise and software competence, which KPIT brings to the table. We are the result of this and thus increased traction with our seeing witnessing Strategic Clients. The supply side constraints are gradually moving in the right direction with attrition numbers consistently on the decline. We are very excited with the addition of Technica to the KPIT family with the closing effected in October 2022”.

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Cash Flow – Major Movement

INR Million Increase in Working Capital – 880 Dividend – 500 Capex - 354 Trust Share Purchase – 228 Cash and Cash Equivalents break-up ₹ M In Investment Accounts (in India) 4,561 In Investment Accounts (outside India) 1,910 In Operating Accounts 3,153 TOTAL 9,624

NET CASH (INR Mln) Q2FY23 Q1FY23 Gross Cash 9,624 10,627 Long Term Debt NIL NIL Short Term Debt NIL NIL NET CASH 9,624 10,627

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DSO Q2FY23 end : 48 Days

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New Engagements

TCV of new engagements won during the Quarter : $ 142 million

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A leading American Car Manufacturer selected KPIT for a multiple engagements in the powertrain domain

A leading European Car Manufacturer awarded KPIT a strategic engagement in the electric powertrain domain

A leading American Commercial Vehicle Manufacturer selected KPIT for a multiyear engagement in the powertrain domain

A leading Asian Car Manufacturer selected KPIT for a strategic program in the connected domain

A leading American Car Manufacturer awarded KPIT multiple programs in the middleware and electric powertrain domains

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• 1 March 2021

Strategic Update

Q2FY23

Reimagining Mobility withYOU

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Technica specializes in production-ready system prototyping (combination of network system architecture, hardware prototyping, integration), automotive ethernet products, & tools for validation. It is headquartered in Munich with presence in Spain, Tunisia, and US, with a team of 600+ engineers. Technica Engineering's deep understanding of vehicle networks and expertise in production-ready system prototyping will provide our clients immense value. This creates excellent synergies with KPITs' extensive software competence and across-the-stack expertise unmatched in the industry We have common strategic clients & we get access to some leading disruptor mobility tech companies https://d1rz4ui464s6g7.cloudfront.net/wp-content/uploads/2022/09/21113520/Acquisition-of-Technica-Engineering-Gmbh.10/19/2022 11 Technica-Electronics-Barcelona-S.L.-Technica-Engineering-Spain-S.L.-Technica-Engineering-Inc.-September-21-2022.pdf

Technica Closure

• The Technica Deal is now closed, and we expect full quarter revenues to be consolidated into KPIT in Q3FY23.

• As stated earlier, Technica has an Annual Revenue run-rate of Euro 42 – 43 million with EBITDA margins in the 20% range

• In H2FY23 we will have certain non-recurring deal related expenses which are factored while arriving at the EBITDA Margin outlook for FY23

• We will now focus on sales and delivery integration, common go-to-market and enabling function integration. Revenue

Growth

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• 1 March 2021

FY23 Outlook

Reimagining Mobility withYOU

FY23 – Outlook

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Growth
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CC Revenue Growth : 31% to 32%

Organic growth outlook 23+% as against 18%-21% earlier. Broad-based organic growth across practices, led by Strategic Clients. Reported $ growth will be impacted adversely due to cross currency headwinds EBITDA Margin : 18.5% to 19% Improvement in net realization. High Growth leveraging fixed costs. Focus on productivity improvement

People

Supply side pressures, albeit easing out, will continue to a certain extent in FY23. Focus on Talent development and retention. Increments, promotions higher than average.

Investments

Technology led R&D Investments, Market facing investments, total 3+% of revenue

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• 1 March 2021

Other Updates

Q2FY23

Reimagining Mobility withYOU

KPIT – Thought Leadership

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A fireside
KPIT as Sponsor at SAE
chat show
COMVEC 22, USA
with JLR
guest on
“Sustainable
Mobility”
-
NASSCOM
KPIT was
invited as a
KPIT invited to
speaker on
speak on Software
“Imaging
Defined Vehicles
Radar”
KPIT @ AWS Auto Accelerate 2022
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KPIT – Societal Development Commitment

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• Water Conservation • KPIT SPARKLE (Engg. Innovation)
• Forest Conservation • SHODH (PhD researchers)
•
Chotte Scientists (School Children)
ENVIRONMENT EDUCATION
Transforming lives of
Making this world a
people through science &
better place to live in
technology education
KPIT SOCIETAL
DEVELOPMENT
Developing innovative COMMITMENT
Utilizing employee
solutions for efficient
strength to make a
energy consumption difference
and renewable supply
ENERGY ENGAGEMENT
• •
Alternate Energy Dedicated Time
• •
Renewable Energy Volunteer Development
•
COVID Warriors
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KPIT is a Socially Responsible Corporate Citizen in each country it works

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KPIT – Celebrating World Environment Day

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KPITians organized a tree plantation activity in collaboration with 14 Trees Foundation (14TF) around Pune.

The KPIT CSR team organized a rice sowing activity at Vajeghar Village (approximately 60 km from Pune) to support the farming efforts of our farmers.

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• 1 March 2021

Financial & Operational Data

Snapshot

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INR MN

Profit & Loss Account Snapshot

DETAILS	Q2FY23	Q1FY23	Q2FY22
Revenue from Operations	7,448.32	6,857.24	5,908.73
Other Income	94.90	152.89	89.37
Total Income	7,543.22	7,010.13	5,998.10
OperatingExpenses	6,066.69	5,525.51	4,868.14
EBITDA	1,381.63	1,331,73	1,040.59
Depreciation	327.41	310.23	290.93
EBIT	1,054.22	1,021.50	749.66
Finance Costs	70.31	63.43	38.56
Change in FMV of Investments	(1.92)	6.12	21.39
Profit Before Exceptional Items	1,076.89	1,117.08	821.86
Exceptional items	-	-	-
Profit/(loss)from equity accounted investee	14.36	3.77	-
PBT	1,091.25	1,120.85	821.86
Tax	255.60	244.26	170.86
PAT	835.65	876.59	651.00
Profit Attributable to owners of Company	834.80	854.28	651.00
Profit Attributable to non-controllinginterest	0.85	22.31	-

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INR MN

Balance Sheet Snapshot

ASSETS	Q2FY23	Q1FY23		EQUITY & LIABILITIES	Q2FY23	Q1FY23
NON-CURRENT ASSETS				EquityShare Capital	2,699.53	2,700.97
				Other Equity	11,219.79	11,210.05
Property, Plant & Equipment	1,933.64	1,905.94
				Equityattributable to owners	13,919.32	13,911.02
Right-of-use Assets	2,091.84	2,363.81
				Non-controlling interests	193.13	175.32
Other Tangible Assets	17.22	11.39
				TOTAL EQUITY	14,112.45	14,086.34
Goodwill & Other Intangibles	2,755.90	2,323.74		NON-CURRENT LIABILITIES
Other Non-Current Assets	1,484.50	1,427.25		Borrowings	NIL	NIL
				Lease Liabilities	1,483.22	1,709.83
TOTAL NON-CURRENT	8,283.10	8,032.13
				Other Non-Current Liabilities	1,182.67	1,220.20
CURRENT ASSETS
				TOTAL NON-CURRENT	2,665.89	2,930.03
Inventories	NIL	NIL
				CURRENT LIABILITIES
Cash and Cash Equivalents	9,624.20	10,627.06		Borrowings	NIL	NIL
Trade Receivables	3,982.13	3,413.04		Trade Payables	1,422.43	1,398.29
				Lease Liabilities	372.66	408.45
Other Current Assets	2,516.20	2,188.29
				Others	5,832.20	5,437.41
TOTAL CURRENT	16,122.53	16,228.39
				TOTAL CURRENT	7,627.29	7,244.15
TOTAL ASSETS	24,405.63	24,260.52
				TOTAL EQUITY AND LIABILITIES	24,405.63	24,260.52

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USD MN

Revenue Break-up

Verticals*	Q2FY23	Q1FY23	Q2FY22	Q-o-Q	Y-o-Y
Passenger Cars	69.30	66.95	59.70	3.5%	16.1%
Commercial Vehicles	23.75	22.38	19.66	6.1%	20.8%

• The balance revenues come from others, which is not a big area as of now

Business Units#	Q2FY23	Q1FY23	Q2FY22	Q-o-Q	Y-o-Y
Feature Development & Integration	64.86	61.64	56.96	5.2%	13.9%
Architecture & Middleware Consulting	12.04	12.83	9.11	(6.2)%	32.1%
Cloud Based Connected Services	17.26	15.41	14.29	12.0%	20.8%

Feature Development & Integration - Electrification, AD-ADAS, Body Electronics and VED Architecture &Middleware Consulting – Middleware, AUTOSAR

Cloud Based Connected Services – Intelligent Cockpit, Digital Connected Solutions and Diagnostics

Geography	Q2FY23	Q1FY23	Q2FY22	Q-o-Q	Y-o-Y
US	34.81	34.95	32.53	(0.4)%	7.0%
Europe	41.11	35.89	32.13	14.5%	27.9%
Asia	18.24	19.04	15.69	(4.2)%	16.3%

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P&L Metrics

		Q2FY23	Q1FY23	Q2FY22	Q-o-Q	Y-o-Y	Y-o-Y
	Revenue by Contract Type
	Time & Material Basis	53.5%	51.0%	43.7%	9.9%	43.4%
	Fixed Price Basis	46.5%	49.0%	56.3%	(0.6)%	(3.2)%
	Clients
	Strategic Client Revenue	85.4%	84.9%	83.8%	5.3%	19.3%
	Active Clients (Period End)	60	60	55
	Revenue per Devp. Employee USD 40,569 41,951			51,910
	R&D Expenditure (USD MN) 2.23 2.13			2.32 17.6% 12.7% 11.0% 20.8% 2.42 2.39
	EBITDA Margin 18.5% 19.4%
	EBIT Margin 14.2% 14.9%
	PAT Margin 11.2% 12.5%
	Effective Tax Rate 23.4% 21.8%
	EPS (Basic) 3.09 3.16
	EPS (Diluted) 3.06 3.13

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Currency wise revenues, Hedging Details

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Currency wise
Q2FY23 Q1FY23 Q2FY22
revenue
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Currency wise revenue	Q2FY23	Q1FY23	Q2FY22
USD	41.1%	42.7%	41.9%
EUR	35.4%	33.5%	34.0%
GBP	8.1%	6.3%	5.5%
JPY	6.9%	8.7%	10.4%
INR	5.9%	5.8%	4.4%
Others	2.6%	2.9%	3.8%

O/s Hedge Details	Q2FY23
Hedge Rates
USD/INR	80.41
EUR/INR	89.58
GBP/INR	102.97
JPY/INR	0.59
Hedge Amounts(Mn)
USD/INR	50.42
EUR/INR	13.00
GBP/INR	2.40
JPY/INR	282.00

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Headcount Data

Period End Headcount	Q2FY23	Q1FY23	Q2FY22	Q-o-Q	Y-o-Y
Development	9.284	8,570	6,192	-	-
Enabling & Sales	632	613	540	-	-
Total	9,916	9,183	6,732	-	-

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• 1 March 2021

Contact Us

Reimagining Mobility withYOU

Conference Call Details

Conference name : KPIT Technologies Q2 FY2023 Post Earnings Conference Call Date : Wednesday October 19, 2022 : 1730 Hrs. Time : Mr. Kishor Patil, Co-founder, CEO & MD Participants Mr. Sachin Tikekar, President, Joint MD Mr. Chinmay Pandit, Whole-time Director & Head Americas Mr. Anup Sable, Whole-time Director & CTO Mrs. Priya Hardikar, CFO Mr. Sunil Phansalkar, Head-IR Dial-in Numbers for all participants Primary number : +91 22 6280 1116 Diamond Pass Registration (choruscall.in) Local Access : +91 22 7115 8017 - - - International Numbers : USA 1 866 746 2133 | UK 0 808 101 1573 | Singapore 800 101 2045 - Hongkong 800 964 448

About KPIT Technologies

KPIT (BSE: 542651; NSE: KPITTECH), KPIT is a global technology company with software solutions that will help mobility leapfrog towards autonomous, clean, smart and connected future. With 9,000+ Automobelievers across the globe, specializing in embedded software, AI & Digital solutions, KPIT enables clients accelerate implementation of next generation mobility technologies. With development centers in Europe, USA, Japan, China, – Thailand and India KPIT works with leaders in mobility and is present where the ecosystem is transforming. 25 For more information, visit http://www.kpit.com

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Contact

For Investor Queries

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Email Sunil.Phansalkar@kpit.com

Desk Phone + 91 20 6770 6997

Cell + 91 98509 66011

Website www.kpit.com

Sunil Phansalkar

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Contact

For Media Queries

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Email Sunil.R@kpit.com

Desk Phone + 91 80 6606 6000 (7865)

Cell + 91 99001 50180

Website www.kpit.com

Sunil B R

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THANK YOU !!

KPIT Technologies Ltd.

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